The Trading Signals

Trend

Strategy & Rules

Index/Derivative:

S&P 500 SPX Weeklys Options

Strategy:

This strategy consists of probability and calculated risk.  We look for continuous short-term trends, and breakouts of support & resistance channels.

  • Entry with intraday charts based on technical analysis.
  • Sell SPX Weeklys Vertical Credit Spread at-the-money (ATM) on the day of expiration with the intent to expire worthless.
  • No trading on half days.  Fed days are acceptable.
  • Do not hold overnight.
  • Maximum one trade per day.
  • Never exceed the maximum risk on any given day.
  • 1:1 Ratio Profit/Loss.
  • Compound interest.

Requirements:

  • Trading platform with options/margin trading approved.

Capital:

This strategy can be traded with the following minimum amounts:

  • $1,000 minimum if your risk level is 25%. (Regulations require a minimum $2,000 in cash or assets in your brokerage account to trade on margin.)
  • $2,500 minimum if your risk level is 10%.
  • $5,000 minimum if your risk level is 5%.

Risk:

Depending on your risk tolerance. Apply one of the following risk levels to your strategy, per trade. No martingale.

  •  5% Risk – Conservative
  • 10% Risk – Aggressive
  • 25% Maximum Risk – VERY AGGRESSIVE

Exit:

  • Let expire worthless (Best)
  • Let expire in-the-money ITM (Worst)
  • Hold until expiration. No manual exit.
  • Let the order fill or expire.